Prosecutor in DeNaples probe to resign, sources say

U.S. Attorney Thomas Marino, the top federal prosecutor for central and northeastern Pennsylvania, will resign within six weeks amid an investigation of Mount Airy Lodge owner Louis DeNaples, according to two sources.

Marino, who has held the position since 2002, is leaving for undisclosed reasons, the sources said.

Also, the federal portion of an ongoing federal/state investigation into organized crime has been transferred from Marino's office to a U.S. attorney's office in Binghamton, N.Y., the sources said, but will be returned to the Middle District after Marino leaves.

The probe in part involves DeNaples, who listed Marino as a reference on his successful application for a slot machine casino license from Pennsylvania, sources and DeNaples' spokesman have said.

Marino earlier had recused himself from that investigation in part because of the slots reference, The Morning Call reported Tuesday, citing sources. In part, investigators want to know whether DeNaples used a middleman to give Gov. Ed Rendell campaign contributions before being awarded a slots license, the newspaper reported Sunday, again citing sources.

Marino, who according to sources has notified the U.S. Department of Justice he will step down, declined to comment through an aide.

"Mr. Marino has no comment, and this office has no comment," said Martin Carlson, the district's first assistant U.S. attorney.

Carlson, the acting U.S. attorney before Marino's appointment, is expected to again be named as a temporary replacement, the sources said. A new nominee may not emerge until after the 2008 presidential election.

The sources have close knowledge of the ongoing probe but are being granted anonymity because they are not authorized to discuss it.

DeNaples, a Scranton businessman whose many companies include Keystone Sanitary Landfill Inc. in Lackawanna County, was awarded a casino license in December 2006 despite criticism over his past, including a 1978 no-contest plea to felony charges involving conspiracy to defraud the government over the Hurricane Agnes cleanup.

Marino was listed as a reference on the state gaming application DeNaples submitted in December 2005.

DeNaples' activities are only part of a joint probe into organized crime by the FBI and the Pennsylvania State Police, sources have said. The Secret Service and Internal Revenue Service also are active in the investigation.

It's unclear when DeNaples' name first surfaced in the broader probe.

Three people, including William D'Elia, the reputed head of the Bufalino crime family in Scranton, have been indicted on money laundering charges. Richard Smalacombe and Frank Pavlico have pleaded guilty and agreed to testify against others. D'Elia, who also was charged in November 2006 with conspiring to kill a witness, is in prison awaiting trial.

DeNaples' spokesman, Kevin Feeley, told The Morning Call on Monday that Marino was one of two people with law enforcement backgrounds who provided references to DeNaples, of Dunmore, Lackawanna County. On Tuesday, Feeley told The Associated Press that DeNaples and Marino, a former district attorney in Lycoming County, had been friends for "10 to 15 years."

Federal guidelines require a U.S. attorney to recuse himself from an investigation "only where a conflict of interest exists or there is an appearance of a conflict of interest or loss of impartiality," according to the Department of Justice Web site.

An investigation is routinely transferred to another district when there's a conflict.

DeNaples, who has previously denied any ties to D'Elia, is the focus of a separate Dauphin County grand jury probing whether DeNaples lied to the state Gaming Control Board about his alleged relationship with D'Elia.

A 2001 affidavit filed in U.S. District Court in Harrisburg linked DeNaples to D'Elia based on accounts from confidential informants of payoffs from DeNaples to D'Elia to protect the Keystone Landfill from mobsters.